Key Highlights

Despite uncertainty and increase in prices of caustic soda, benzene in international market, the company is not only able to pass on the rise, but also able to report better margins.

Couple of reasons as highlighted by the management: One is the Chinese slowdown towards exports of speciality chemicals due to internal policy framework by the government. This has helped many Indian companies to generate better export realisation. Other is company being backward integrated and is able source raw material locally and long term relationship with suppliers has helped to lower down raw material price increases.

Expects the policy framework in China to continue thus helping many Indian speciality chemical exporters including Deepak Nitrite to benefit.

Current higher margins are at least sustainable going forward, if not getting higher.

The company has done some further backward integration in specialty chemical business and is waiting for the government regulatory approval, which if received will result in even higher margins than the segmental margin of around 24-26% in this segment.

Debt of around Rs 600 crore as on Sep 17.

Phenol project to commission by end of FY 18. Of the total Rs 1400 crore, around Rs 900 crore is so far spent and incurred.

Rise in crude oil prices have helped slightly better realization of Phenol.

The company is in comfortable position right now in terms of products. Higher realisation and volumes are helping margins. Even crude goes to around US $ 80, then also margin are not a problem.

New products in Pharma segment now constitute around Rs 41 crore of sales in speciality chemical segment. Company will end FY 18 with around Rs 80 crore of sales in this segment and targets around Rs 150 crore in FY 19. This is a very high margin business.

Higher realisation has also helped the performance product segment to break even and expects better margins in this segment.

Expects the momentum to be strong in bulk and chemical segment. The company has added some high value agro chemical products which will see the commercial production during end of FY 18.

Overall margins can improve further from current levels going forward. Higher realisation and volumes will continue to support growth.